Central Petroleum, New Zealand Oil & Gas ink gas supply agreements with Arafura

• Central Petroleum (ASX:CTP) enters into a GSA with Arafura (ASX:ARU) providing up to 6.85 PJ of gas over a five-year period starting from 2026
• Gas supply will be combined with existing Mereenie gas supply from MM, NZOG, and Cue, resulting in a total delivery of up to 27.4 PJ of gas to Arafura
• CTP last traded at 4.5 cents; ARU last traded at 13 cents

Central Petroleum (ASX:CTP) has signed a gas supply agreement (GSA) with Arafura Rare Earths (ASX:ARU) to provide up to 6.85 PJ of gas over a five-year period starting from 2026.

The agreement is for a firm gas supply ex-field, including take-or-pay provisions and a fixed price that adjusts with the consumer price index.

The gas supplied will be combined with the existing Mereenie gas supply from MM, NZOG, and Cue, and will result in a total delivery of up to 27.4 PJ of gas to Arafura.

“This new gas supply agreement allows Central to broaden its customer base across the NT and demonstrates the critical role that gas has to play in the transition to a cleaner energy future,” Central’s Managing Director and CEO Leon Devaney said.

“We are delighted to provide our support to Arafura’s Nolans rare earths project and hope this will be the start of a long relationship.”

New Zealand Oil & Gas (ASX:NZO) also announced it signed a GSA with Arafura to supply up to 4.8 PJ of gas for up to five years from 2026.

Nolan rare earth project

Arafura is currently developing the Nolans rare earth project, located north of Alice Springs. The project focuses on neodymium and praseodymium, crucial resources for electric vehicles and renewable energy technology.

Arafura has to fulfill GSA conditions by June 30, 2024, including project approvals, investment decision, power and transport agreements, and debt financing.

Central Petroleum anticipates increased contributions to the gas market with the commissioning of the Palm Valley 12 well in November 2022 and recent well recompletions at Mereenie.

CTP last traded at 4.5 cents; ARU last traded at 13 cents.